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Defence contractor RTX has agreed to pay more than $950mn over claims it bribed a Qatari official to facilitate weapons sales to the country and defrauded the Pentagon into overpaying for weapons including Patriot missile systems.
The company, formerly known as Raytheon, was accused of defrauding the US defence department into paying an extra $111mn for the missile system and the operation of a radar system between 2012 and 2018.
RTX also entered into a deferred prosecution agreement with US federal prosecutors for conspiring to bribe a Qatari official and failing to disclose those bribes in export licensing agreements. Prosecutors said the company paid $30mn to a member of Qatar’s council of the ruling family and a cousin of the Qatari emir, Tamim bin Hamad al-Thani, in an attempt to sell its Patriot system to the Gulf state, which is a crucial US ally in the Middle East.
Officials at the Qatar embassy in Washington did not immediately respond to requests for comment.
Breon Peace, US attorney the eastern district of New York, said: “Over the course of several years, Raytheon employees bribed a high-level Qatari military official to obtain lucrative defence contracts and concealed the bribe payments by falsifying documents to the government, in violation of laws including those designed to protect our national security.”
“We will continue to pursue justice against corruption . . . to ensure this misconduct is not repeated,” he added.
As part of the agreement, the company will install an independent compliance monitor for a three-year period.
RTX also settled a claim from the Securities and Exchange Commission, which alleged it had violated anti-bribery and accounting laws.
“Time and time again, managers and employees raised concerns over red flags of corruption regarding the agent,” the SEC claimed, referring to the Qatari relative of the Emir. “Yet, the relationship with the agent, who provided very little support for work performed, continued unchecked.”
Shares in RTX closed the day higher in New York, following news of the penalty, which was in-line with the amount set-aside by the company in its last quarterly earnings report in July.
“RTX is taking responsibility for the misconduct that occurred,” the company said. “These legacy legal matters relate to conduct that occurred at Raytheon Company largely prior to 2020.”
RTX is one of the Pentagon’s largest contractors and is known for its missiles systems. Along with the Patriot, it makes the Stinger and, in a joint venture with Lockheed Martin, Javelin missiles, which Ukraine has used against Russia. It also partners with Israeli defence company Rafael Advanced Defense Systems on the Jewish state’s Iron Dome interceptor system.
Russia’s invasion of Ukraine has spurred global demand for weapons, leading to higher revenues at RTX and other so-called prime contractors. RTX had $19.7bn in sales in the second quarter of 2024, up 8 per cent from the same period last year. Its 2023 revenue totalled $68.9bn.
It will report its third-quarter earnings next week.
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